Hong Kong’s public accounts for the financial year ended March 2026 included a HK$5 billion non-recurrent payment into a special fund for safeguarding national security.

The Standard reported on May 19 that the payment was the third allocation to the fund since Beijing imposed the National Security Law on Hong Kong in 2020. Financial Secretary Paul Chan put HK$8 billion into the fund in December 2020 and another HK$5 billion in March 2023. The latest allocation brings the total to HK$18 billion.

In local discussion, the money is sometimes described as defence spending. The Basic Law uses a different distinction. Article 14 says the central government is responsible for Hong Kong’s defence and bears the cost of the garrison. The HK$18 billion in Hong Kong’s accounts is booked as local spending on safeguarding national security.

Exterior of the Hong Kong Legislative Council Complex
The Hong Kong Legislative Council Complex. The national security special fund is reported to the legislature each year, but the reports do not disclose detailed spending items. Image: 17jiangz1 / Wikimedia Commons, CC BY-SA 4.0.

A fund outside ordinary line items

Article 19 of the National Security Law created the funding channel. With the Chief Executive’s approval, the Financial Secretary may draw money from general revenue for safeguarding national security and approve related posts. The same article says those appropriations and posts are not subject to restrictions in relevant provisions of Hong Kong law.

The Financial Secretary submits an annual report to the Legislative Council on the control and management of the fund. The report submitted in July 2025 said the fund had received HK$13 billion by then. It divided spending into recurrent and non-recurrent categories. Salaries, allowances, specialised services, rents and operating costs fell into the first group. Minor works, specialised equipment, systems, machinery and vehicles fell into the second.

The report did not say how much was spent in each category. It did not list contractors, purchases or staff numbers. Citing Article 14 of the National Security Law, the report said no institution, organisation or individual in Hong Kong may interfere with the work of the city’s Committee for Safeguarding National Security, and information relating to its work is not subject to disclosure.

Date Public record Amount What was disclosed
December 2020 The Financial Secretary appropriated money from general revenue HK$8 billion LegCo papers said the money was for national security spending in the coming years
March 2023 The fund received another appropriation HK$5 billion The 2023 report said the sum would be covered in a later report
Financial year ended March 2026 Quarterly accounts showed a new non-recurrent payment HK$5 billion The Standard reported that cumulative appropriations had reached HK$18 billion
Sources: Hong Kong Legislative Council reports in 2023 and 2025 on the control and management of the national security special fund; The Standard. HK$18 billion refers to cumulative appropriations to the fund, not confirmed spending.

Garrison costs are separate

The 2025 report to LegCo said the Office for Safeguarding National Security of the Central People’s Government in Hong Kong is funded by Beijing, so its expenditure is not covered by the HK$13 billion reported at the time. The People’s Liberation Army garrison is also funded by the central government under the Basic Law and does not appear as Hong Kong government expenditure.

Hong Kong’s own fiscal process works differently for ordinary departments. They seek money through budgets and subheads, appear before the Finance Committee and remain subject to audit. The national security fund appears in public accounts as a total amount. Spending details that would normally be open to scrutiny are limited by national security legislation.

LegCo papers do not identify which agencies received how much money. They do not publish equipment, systems or services contracts. The public can verify the size of the appropriation, but not how the money is used.

LegCo’s check is narrower

Hong Kong’s disciplined services have long had confidential work. Police, immigration and correctional services still list expenditure, posts and performance indicators in the budget. The national security fund keeps the form of annual reporting, but not the line items that would allow legislators to question spending in the usual way.

The fund now operates in a legislature remade after 2019. Hong Kong changed its electoral system in 2021 under what officials called “patriots administering Hong Kong.” District councils were restructured in 2023, sharply reducing directly elected seats. In 2024, Hong Kong passed its own security legislation under Article 23 of the Basic Law.

Before and after the 2019 protests, budget disputes could run through the Finance Committee, district council meetings and media scrutiny for weeks or months. After the electoral changes, the old opposition bloc disappeared from the legislature and filibustering in the Finance Committee ended. Budget papers are still published and meetings still take place, but spending under the national security fund is rarely examined item by item.

More money during restraint

The 2026/27 budget proposed cutting recurrent government expenditure by 2% in both 2026/27 and 2027/28, with projected savings of HK$7.8 billion and HK$15.6 billion compared with 2025/26. The government also plans to transfer HK$150 billion from the Exchange Fund to the Capital Works Reserve Fund over the next two years for the Northern Metropolis and other projects.

Land revenue has fallen, the property market has been weak and the government has turned more often to bond issuance. The 2026/27 budget said the consolidated account for 2025/26 was expected to record a HK$2.9 billion surplus and fiscal reserves of HK$657.2 billion at the end of March 2026. The surplus figure was calculated after bond issuance and repayment.

In the same budget cycle, the national security fund still received HK$5 billion. Education, social welfare, infrastructure and the civil service all face fiscal reshuffling. National security spending continues through its own channel.

Details remain closed

Officials have argued since 2020 that the unrest of 2019 showed the need for stable national security resources. Government documents have repeatedly linked security with administrative efficiency and economic recovery. Inside the current legislature, that argument faces little organised resistance.

Critics focus on what cannot be checked. When spending and posts can leave the ordinary scrutiny process on confidentiality grounds, legislators, journalists and the public have little way to judge whether the spending is proportionate. Secrecy can protect operations. It can also prevent outsiders from checking whether purchases are necessary, resources are duplicated or powers are expanding.

If the next annual report follows the 2023 and 2025 format, LegCo will again see only broad recurrent and non-recurrent categories. The public documents will not show how much went to a project, a system or a service contract.

After three appropriations, the fund no longer looks like a one-off reserve. The Financial Secretary can transfer money from general revenue, LegCo receives an annual report, and the details remain inside the confidential part of Hong Kong’s security state.